For over four decades, the Government of Ghana has strongly supported United Nations with troops and equipment in peacekeeping missions around the world. Ghana has a reputation for professionalism and commitment to duty in her participation in international peace support operations. Ghana Armed Forces (GAF) has earned over the years under the UN flag in Africa, the Middle East and Europe, and also as a participant in the ECOWAS Monitoring Group (ECOMOG) operations in Liberia, Sierra Leone and Cote d'Ivoire.
Ghana's involvement in UN Peacekeeping operations dates back to the year 1960 when she first sent her troops to take part in the UN Peacekeeping Operation in the then Congo (Kinshasa); now Democratic Republic of Congo. Ghana has continued to contribute troops to UN peacekeeping operations across the globe and currently the 10th largest contributor of military personnel for UN peacekeeping operations in the world. Apart from providing troops to the UN peacekeeping missions, Ghana provides military observers, staff officers, civil police and specialists to various UN missions.
GAF is currently providing 2,636 formed troops to four (4) UN peacekeeping missions namely: United Nations Interim Force in Lebanon (UNIFIL), United Nations Organization Stabilization Mission in DR Congo (MONUSCO), United Nations Mission in Liberia (UNMIL) and United Nations Mission in Cote d'Ivoire (UNOCI).
Until 1996 UN was providing and maintaining all the major equipment and most of the logistics required by troops in the various missions. Ghana like many other troop contributing countries was only reimbursed by the UN for her troops, their personnel clothing, gear and equipment, personal weaponry and training ammunition provided.
The UN General Assembly by Resolution 50/222 of 11 April 1996 authorized the implementation of a new reimbursement system which was designed to encourage Troop Contributing Countries (TCC) to provide all the major equipment required to support their troops in peacekeeping missions. Under this new arrangement, the Wet and Dry Lease systems of reimbursement were introduced.
The Wet Lease is where the TCC provides and assumes responsibility for the maintenance and support for deployed major equipment.
Dry Lease means the TCC provides the major equipment and the UN assumes responsibility for the maintenance of the equipment.
Self-sustainment was also incorporated as a logistic support concept for contingents in the UN peacekeeping missions. Under self-sustainment, TCC provides some specific or all logistics support to the contingent on a reimbursable basis. Self-sustainment covers areas such as medical, tentage, laundry and cleaning, communication, catering, accommodation and electrical among others.
Currently, with the exception of UNIFIL, Ghanaian troops in the other three (3) UN missions are operating under the wet lease system of reimbursement. Ghana Government provides all the major equipment and some self-sustainment requirements by the missions and is reimbursed monthly by the UN on the basis that the equipment satisfy the UN criterion for equipment reimbursement. It is worth mentioning that military equipment are capital intensive and the only way to break even on such huge capital investment is to ensure that the equipment deployed in the UN missions are always in good condition to attract the monthly anticipated reimbursement.
This paradigm shift in UN peacekeeping operations has made it very attractive and hence most countries; mainly third world or developing countries are competing seriously to find places in current missions for their troops to enable them enjoy the enormous profits associated with deploying troops and equipment in UN peacekeeping operations.
Interestingly, countries like India, Pakistan and Bangladesh who had little or no recognition in terms of providing troops for peacekeeping missions comparatively, are now the largest troop contributing countries. They have consistently expressed their readiness to contribute troops and equipment to UN missions since the introduction of the wet and dry lease UN system of reimbursement to enjoy the huge benefits therein.
It has been mentioned in some circles that if peacekeeping were an exportable commodity Ghana would have been a rich country by amassing huge amount of money from it (Mwausi Afele 2000). [1] The fact now is that, contributing troops and equipment to UN missions has now become very attractive and competitive among nations. The motivating factor has to do with the huge returns that could be realized from the capital invested; mainly from the major equipment that TCCs deploy in the missions.
The ability therefore for TCCs to break-even at the shortest possible period and reap benefits afterwards through continuous reimbursement by the UN for as long as the equipment or facilities remain functional in the mission area is what has now made peace keeping attractive to member states.
Undoubtedly, the UN now has the bargaining power to retain or withdraw the participation of any troop contributing country in missions depending on their readiness for role mainly in terms of operations and supporting logistics. The development of competitive strategies that seek to ensure sound logistics and operational excellence is what troop contributing countries need to remain in this new business and at the same time derive maximum profit.
Additionally, by embarking on logistical performance evaluation of the entire supply chain could be an effective means of identifying weaknesses in adopted strategies to ensue fine tuning. Routine logistical performance assessments can therefore be seen as an indispensable management tool capable of providing the necessary assistance for performance improvement in pursuit of supply chain excellence.
1.2 STATEMENT OF THE PROBLEM
An organization's strategy is said to be the "game plan" management has for positioning the organization in a chosen market arena, competing successfully, pleasing customers, and achieving good business performance (Thompson and Strickland 1999). [2] This implies that organizations need appropriate positioning in their environment; specifically to the extent to which products and services meet clearly identified market needs.
Competition is currently brewing among member states; specifically from the developing and third world states in contributing troops and major equipment for UN peacekeeping missions. The UN now has a bargaining power in their choice of which member state contributes troops and major equipment for missions as well as withdrawing non-performing and non-conforming member states from their missions. This has generated intense lobbying by member states to gain foothold into the UN peacekeeping arena. The ability to provide all the major equipment required for a mission and having the capacity to effectively sustain the equipment provided, is therefore the key to remain in the UN business in order to enjoy the benefits therein. Ghana Armed Forces is therefore confronted with the treat of living up to standards before she is kicked out of the UN business.
An overriding problem has to do with the country's Armed Forces' credibility and this is accessed from the standpoint of its military equipment base and the ability to utilize the equipment to effectively and efficiently accomplish assigned roles. Ghana's credibility in UN peace keeping circles is currently been challenged due to a weak logistics support base that cannot support mission requirements in most instances. The treat of new comers into the UN peacekeeping landscape has become imminent and requires the Ghana Armed Forces to strategize to avert the treats.
1.3 RESEARCH QUESTIONS
Ghana also stands to lose huge sums of monies if equipment deployed in the missions does not attract any reimbursement simply because they do not satisfy the UN criterion for equipment reimbursement. There is the need therefore for GAF to employ sound logistics practices in UN peacekeeping operations has become a strategic imperative. Most importantly, an effective approach to logistics management in peacekeeping operations will be expected to address such questions as:
What logistics management plan has the GAF developed to support international peacekeeping operations?
How has the plan been implemented?
How are logistical performances evaluated?
1.4 RESEARCH AIM AND OBJECTIVES
The aim of this thesis is to evaluate the logistical performance of Ghana Armed Forces units deployed in the United Nations Observation Mission in La Cote D'Ivoire (UNOCI) with the view to recommending ways for improvement.
The specific objectives seek to address the following:
To identify and evaluate GAF's strategic logistics management plan for UNOCI deployment.
To establish the depth of implementation of the plan.
How logistical performances are evaluated.
1.5 SIGNIFICANCE OF STUDY
The study will bring out any shortfalls that are inherent in the GAF strategic logistics management plan for international peacekeeping missions and hence aid the GAF high command in the review of the plan. Additionally, it will serve as a reference document for the GAF logistics department for the effective implementation of the logistics plan in all the missions.
The study will also be beneficial to commanding officers and the logistics detachments in all the missions as the document will arm them adequately to adopt the appropriate logistics procedures and practices to sustain and maintain all their equipment to ensure that maximum reimbursement are realized at all times.
The thesis will also be beneficial to other governmental agencies that are embarking on some income generating activity alongside their core functions to plan and manage their logistics effectively and efficiently to minimize costs and maximize profits.
1.6 SCOPE AND LIMITATION OF THE STUDY
The focus of this study is on the performance evaluation of Ghana Armed Forces logistics support for UN peacekeeping missions it is currently involved in. A major limitation is the use of only unclassified documents and those classified 'Restricted' and below. Finally, the study is limited to the peacekeeping mission in Cote d'Ivoire alone due to proximity time and budgetary constraints.
This research is premised on the planning and adoption of sound logistics practices in peacekeeping missions. Military operations involve a long logistics trail that requires careful planning and monitoring. Having the perfect structure to plan, implement and control the efficient, cost effective forward and reverse flow of logistics is an imperative for success in the new UN peacekeeping paradigm.
1.6 ORGANISATION OF THE STUDY
The thesis is organized into five chapters.
Chapter one consists of the introductory aspect of the study including statement of the problem, research questions, aim and objectives, significance, scope and limitation, and the organization of the study.
Chapter two provides a literature review. It reviews the scholarship and literature relevant to the study by concentrating on the; concepts of strategic supply chain and logistics management, and aspects of strategic management with specific emphasis on logistics strategy development, implementation and controls. Additionally, methods of evaluating logistics performance as well as UN logistical procedures are reviewed.
Chapter three is devoted to the methodology used in this study. The chapter looks at the study area, design of study, data collection approaches, description of the study, sampling and the constraints/problems encountered.
Chapter four is the analysis and discussion of results of the survey by way of interviews and questionnaires and publicly available data that must be combined to test the observations and preposition.
Chapter five provides the summary, concluding remarks and recommendations and a suggestion for future direction of the study in this field.
CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION
A lot of research has been conducted in the subject area of logistics and supply chain management to espouse the need for organisations to regard their logistics and supply chain as a strategic capability. This has been partly attributed to the fact that they depict a critical success factor for corporate performance and hence needs to be managed accordingly. Many authors have published books and journals to wholly or partly cover the subject area for use in the academia as well for organisations to be current on logistics and supply chain management trends and practices.
An in-depth knowledge and understanding of the rudiments of strategic logistics and supply chain management undoubtedly, serves as leverage for logistics and supply chain researchers and practitioners to make sound analysis in achieving research and business objectives (Merminod et al; 2007) . Although most of the research works in this subject area are focused on the business sector, the results are as well suitable and applicable to non-profit making organisations.
The focus of this thesis is on logistics and supply chain management practices in a military organisation. Although the military recognizes logistics as crucial to the success of all operations, it has not placed much emphasis on its utilization for financial benefits since their core function is on the provision of public service that bother mostly on national interests (Rutner et al 2012). In order to take advantage of the financial avenue that United Nations peacekeeping has opened up for troop contributing countries, it has become an imperative for the military of most countries to blend their logistics operations with business logistics to be able to maintain credibility and be competitive as a consequence in their participation in UN peace keeping missions.
This chapter will therefore review the concepts of logistics and supply chain management in the business setting and briefly highlight on the importance of military logistics as well as UN logistics. It will dovetail into strategic logistics management planning and implementation as they constitute a major driving force for all successful business undertakings. Finally a review of literature on logistics and supply chain performance measures would be carried out.
2.1 LOGISTICS MANAGEMENT
A number of terms have been used by individuals when referring to logistics. Langley et al (2009) listed logistics management, business logistics management, integrated logistics management, materials management, physical distribution management, marketing logistics, industrial logistics and distribution as some of the terms used to describe logistics. Langley et al (2009) argued that logistics management is the most widely accepted term and indicated that it encompassed logistics not only in the private sector but also in the public/government and nonprofit sectors.
Whilst Martin Christopher (2011) defined logistics as the process of strategically managing the procurement, movement and storage of materials, parts, and finished inventory and the related information flows through the organisation and its marketing channels in such a way that current and future profitability are maximised through the cost-effective fulfillment of orders, Longley et al (2009) viewed logistics from a more customer perspective. They defined logistics as the process of anticipating customer needs and wants; acquiring capital, materials, people, technologies, and information necessary to meet those needs and wants; optimising the goods or service producing network to fulfill customer requests; and utilising the network to fulfill customer requests in a timely manner.
Logistics management has also been defined by the Council for Supply Chain Management (CSCMP) as that part of supply chain management that deals with the planning, implementation and control of the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer requirement (CSCMP, 2006). This definition as well focused on the customer and identified reverse flows in addition. It was also emphatic on logistics management being part of supply chain management.
As indicated by Alan Rushton et al (2007), the commonality in all the above definitions is cost effectiveness and customer service. They asserted that logistics concern of industries was the efficient transfer of goods from the source of supply through the place of manufacture to the point of consumption in a cost-effective way whilst providing an acceptable service to the customer.
It has as well been pointed out that logistics owes its origin to the military that have long recognised the importance of logistical activities in national defense (Coyle et al 2003). It has also been suggested that logistics should be viewed as part of management and should have the following four subdivisions (Coyle et al 2003):
Business Logistics: That part of the supply chain process that a plan, implement, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of use or consumption in order to meet customer requirements.
Military Logistics: The design and integration of all aspects of support for the operational capability of the military forces and their equipment to ensure readiness, reliability, and efficiency.
Event Logistics: The network of activities, facilities, and personnel required to organize, schedule, and deploy the resources for an event to take place and to efficiently withdraw after the event.
Service Logistics: The acquisition, scheduling, and management of facilities/assets, personnel, and materials to support and sustain a service operation or business.
They went further to highlight some common characteristics in the four subdivisions as forecasting, scheduling, and transportation but indicated that they have some differences in terms of their primary purpose. Coyle et al (2003) further argued that all the four subdivisions could be viewed in a supply chain context; implying that upstream and downstream there are other organisations that play a role in their overall success and long-run viability.
They gave a general definition of logistics that appears to encompass all the four sub disciplines as the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimising the goods or service producing network to fulfill customer requests; and utilizing the network to fulfill customer request in a timely way.
Logistics again is said to have a micro perspective dimension which examines the relationship between logistics and other functional areas in an organisation such as marketing, manufacturing/operations, finances and accounting and others. This implies that logistics actually focuses upon processes that cut across traditional functional areas with particular emphasis upon the supply chain (Coyle et al 2003). This therefore suggests that logistics management should be viewed in the context of supply chain management (SCM).
2.2 SUPPLY CHAIN MANAGEMENT AS A WIDER CONCEPT
Although industry and academia have investigated the concept of SCM for the last decade, there is still no consistent definition of the concept. As a result, there is generally a lack of consistency in meaning and clarity across the diverse definitions of SCM available in the literature.
Considering definitions of SCM and logistics management, the definitions made by the Council of Supply Chain Management Professionals, CSCMP (former Council of Logistics Management, CLM), are one of the most cited sources. In a document on their homepage, SCM is defined as follows: "Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also included coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies" (www.cscmp.org).
Mentzer et al. (2001) make an invaluable contribution to the understanding of SCM by arguing that authors try to include two different things within the same definition and claimed it was the reason for the confusion and many definitions of SCM. In order to sort out the somewhat unclear definition, Mentzer et al. (2001) distinguish between SCM as a management philosophy on the one hand, and the actions undertaken to realise the philosophy on the other. It is suggested that the management philosophy, called supply chain orientation (SCO) is a prerequisite for SCM, which should be interpreted as actions undertaken by actors in a supply chain in order to realise the SCO. SCO is defined as "the recognition by an organisation of the systemic, strategic implications of the tactical activities involved in managing the various flows in a supply chain" (Mentzer et al., 2001). SCM in turn, is defined as "the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole" (Mentzer et al. 2001).
As stated in the two definitions of SCM above, all kinds of business functions in a company can be included in the SCM expression. Following these definitions, one part (as clearly stated in the definition from CSCMP) of SCM is logistics management.
In their definition of logistics management, CSCMP again clearly point to the fact that SCM is considered as a broader definition: "Logistics management is that part of supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between point of origin and the point of consumption in order to meet customer's requirements. Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials management, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers." (www.cscmp.org)
Although the CSCMP definition for logistics management points out that it is parts of SCM, the relationship between the two concepts is however not always easily understood. The issue is that different opinions exist about what they actually encompass. Sometimes SCM and Logistics management are interpreted in the same way and are therefore often used interchangeably in literature. Min and Menzer (2004) argued that in defining SCM, it is common to relate it to logistics to better understand the approach, since the concept of SCM started in the logistics literature.
Halldorsson and Larson (2004) show that SCM relative to logistics can be viewed in four different ways; from the views of the Traditionalist, Re-labelling, Unionist and Intersectionist. They proposed that one reason for these multiple perspective is that SCM has not been transparent by one universal definition. According to the Traditionalists view, the logistics function hires "supply chain analysts" to focus on cross-functional and inter-organisational issues. Some authors do not distinguish between SCM and logistics. They just change the name. The Unionists view SCM as more than simply logistics, but rather also as purchasing, operations, and marketing. While the Intersectionists, describe it as a staff function or internal consultants (Halldorsson and Larson, 2004).
For the SCM in the context of Ghana Armed Forces international peacekeeping operations, the most suitable definition would be that of the Unionist view of SCM. The reason for the Unionist view is that peace keeping logistics covers all decisions along the flow of materials (purchasing, logistics, and customer service). Martin Christopher's (1998) definition for SCM is a typical example of such views. Martin Christopher (1998) defines SCM as an extension of logistics. Christopher (2011) argues that logistics is essentially a planning orientation and framework that seeks to create a single plan for the flow of products and information through a business while SCM builds upon this framework and seeks to achieve linkage and coordination between processes of other entities in the pipeline. Schary (1998) also sees supply chain as more than logistics. Supply chain includes the flow of materials and products to the customers and more than that; it also includes the organisations that are part of these processes, crossing organisational boundaries to link their internal operations as part of this system. The supply chain recognises that there are cooperative arrangements that tie firms to each other and in that way tie their success to the chain as a whole. The scope of SCM therefore spans the entire set of organisations from procurement of materials and product components to delivery of the completed product to the final customer (Schary, 1998).
Within a firm's supply chain management, logistics is the work required to move and geographically position inventory. As such, logistics is a subset of and occurs within the broader framework of a supply chain. Logistics is the process that creates value by timing and positioning inventory. Logistics is the combination of a firm's order management, inventory, transportation, warehousing, materials handling, and packaging as integrated throughout a facility network. Integrated logistics serves to link and synchronize the overall supply chain as a continuous process and is essential for effective supply chain connectivity. Supply chain strategy therefore establishes the operating framework within which logistics is performed.
This thesis will therefore look at logistical performance holistically from a SCM perspective. Although in instances where the focus is organisation specific, an integrated logistics management of all the logistics activities would be stressed amidst the entire supply chain.
2.3 LOGISTICS AND SUPPLY CHAIN MANAGEMENT PROCESSES
Mentzer (2001) classified SCM in three categories as; a management philosophy, implementation of a management philosophy and as a set of management processes. Cooper et al (1997) in their presentation entitled "Supply Chain Management, More Than a New Name for Logistics" also indicated that the SCM framework encompasses the combination of three closely inter-related elements; the structure of the supply chain, the supply chain business processes and the supply chain components.
In their explanation for SCM as a set of management processes, Mentzer (2001) indicates that the implementation of the SCM framework is carried through by three primary elements; the supply chain network structure, the supply chain process and the management component which are supportive of that of Cooper et al (1997) SCM framework.
The implementation of SCM therefore involves identifying the supply chain members, with whom it is critical to link, what processes need to be linked with each of these key members, and what type/level of integration applies to each process link. The objective of SCM is to maximise competitiveness and profitability for the company as well as the whole supply chain network including the end customer (Lambert et al, 1998).
2.3.1 Supply Chain Management Processes
The Global Supply Chain Forum identified eight (8) key processes that make up the core of SCM ie, Customer Relationship Management, Customer Service Management, Demand Management, Order Fulfillment, Manufacturing Flow Management, Procurement, Product Development and Commercialisation, and Returns Management (Cooper et al, 1997).
The eight (8) key business processes run along the supply chain and cut across firms and functional silos within each firm. Functional silos include marketing, research and development, finance, production, purchasing and logistics.
The activities in the processes reside inside a functional silo, but the entire process will not be contained within a function. While management teams of all the firms in each supply chain should consider these processes. However the relative importance of each process and specific activities included may vary.
Tier 2
Supplier
Tier 1
Supplier
Manufacturer
Customer
End User
R&D
Logistics
Finance
M&S
Production
Purchasing
INFORMATION FLOW
PRODUCT FLOW
Returns Management
Product Development and Commercialization
Procurement
Manufacturing Flow Management
Order Fulfilment
Demand Management
Customer Service Management
Customer Relationship Management
Figure 2.1
A discussion on each of the processes is as follows:
Customer Relationship Management. The objective of customer relationship management at the strategic level is to identify customer segments, provide criteria for categorising customers, provide customer teams with guidelines for customizing the product and service offer develop a framework for matrics and provide guidelines for the sharing of process improvement benefits with the customers. Meanwhile, at the operational level, CRM process deals with writing and implementing the Product and Service Offers (PSOs). The customer relationship management process provides the structure for how the relationship with the customer is developed and maintained. Customer teams tailor PSO to meet the needs of customer according to market segmentation. Teams work with key accounts to improve on current processes, smoothen demand variability and eliminate demand variability. (Croxton et al, 2001).
Customer Service Management. The customer service management process is the firm's face to the customer. It provides the single source of customer information, such as product availability, shipping dates and order status. The objective of customer service management at the strategic level is to develop the necessary infrastructure and coordination means for implementing the PSO and providing a key point of contact to the customer. At the operational level, the CSM process is responsible for responding to both internal and external events. (Croxton, et al, 2001)
Order Fulfillment. A key to effective supply chain management is to meet customer requirements in terms of order fulfillment. Effective order fulfillment requires integration of the firm's manufacturing, logistics and marketing plans. The process defines the specific steps regarding how customer orders are: generated, communicated, entered, processed, documented, picked, delivered and handled post delivery (Croxton et al, 2001). According to Croxton and Keely, the design and operation of the network has a significant influence on the cost and performance of the system.
Manufacturing Flow Management. The manufacturing flow process deals with making the products and establishing the manufacturing flexibility needed to serve the target markets. The process includes all activities necessary for managing the product flow through the manufacturing facilities and for obtaining, implementing and managing flexibility. This could be categorised into Strategic Sub-Processes which are determine degree of manufacturing flexibility, determine push-pull boundaries, identify manufacturing constrains, determine, manufacturing capabilities and Operational Sub-Processes including developing a master production schedule and last but not least synchronised capacity and demand (Croxton et al, 2001).
Supplier Relationship Management. Supplier relationship management is the process that determines how a company interacts with its suppliers. It is a mirror image of customer relationship management. Just as a company needs to develop relationships with its customers, it needs to foster relationships with its suppliers too. At the strategic level, the output of the process is an understanding of the levels of relationships the firm will maintain, and the process for segmenting the suppliers and working with them to develop appropriate PSOs. Once the process team determines the criteria for categorisation of suppliers and the levels of customisation, the operational supplier relationship management process develops and manages the PSOs.
Product Development and Commercialisation. Developing new products quickly and getting them to the marketplace in an efficient manner is a major component of corporate success. Time to market is a critical objective of this process. As product life cycles shorten, the right products must be developed and successfully launched in ever-shorter timeframes in order to remain competitive. This includes the sub-processes of establish new product project guidelines, develop product rollout issues and constraints, design and build prototypes, make/buy decision, determine product distribution channels and etc. (Croxton et al, 2001).
Returns Management. Effective returns management is a critical part of supply chain management. While many firms neglect the returns process because management does not believe it is important, this process can assist the firm in achieving a sustainable competitive advantage. Effective management of the returns process enables the firm to identify productivity improvement opportunities and breakthrough projects (Croxton, et al, 2001). At the operational level, the returns management process is about managing the day-to-day returns activities, initiated by a customer. The subsequent sub-processes including analyses of the return and select appropriate dispositions and post-return credit management.
2.3.2 Logistics Management Activities
Langley et al (2009) deduced a comprehensive list of logistics activities from the definitions of logistics for which they presumed logistics managers might be responsible. The activities listed includes transportation, warehousing and storage, industrial packaging, materials management, inventory control, order fulfillment, demand forecasting, production planning/scheduling, procurement, customer service, facility location, return goods handling, parts and service support and salvage and scrap disposal.
At a glance, it could be said with certainty that almost all the logistics activities mentioned above are contained in the SCM processes enumerated by Croxton et al (2001). It is further advocated that organisations with well-developed logistics departments might not place responsibility for all these activities within the logistics area and hence decisions regarding these areas must utilize the systems view that is critical to logistics management (Langley et al, 2009).
2.4 UNITED NATIONS CONCEPT OF LOGISTICS
2.4.1 UN Logistics Defined
Logistics is defined as the science of planning and carrying out the administration, movement and maintenance of forces and materials needed on a UN mission, and includes activities related to communications, engineering and aviation services (UNITAR POCI 2002). In its most fundamental sense, logistics is the art of transporting, housing, supplying and providing technical support to military troops. However, in the context of UN operations, because support is often required for non-military personnel and circumstances, this definition is broadened. Thus the UN definition of logistics covers not only the needs of military and police units, but also of related civilian personnel originating from 189 different countries and widely diverse cultures (UNITAR POCI 2002) UN logistics covers all aspects of the needs and physical support for missions to be carried out. This covers finances, supplies, transportation, technical support and housing needs, as well as administrative, communications, engineering and aviation services (UNITAR POCI 2002).
2.4.2 Principles of UN Logistics
Logistics for all UN missions according to the UNITAR POCI (2002) have common principles, as all UN missions require mobility, flexibility and is a multination venture. The principles of UN logistics are therefore discussed as follows:
Responsibility. Contributing member states and the UN have a collective responsibility to ensure that forces deployed on any UN operation are fully equipped and supported. This may be achieved either through national or cooperative arrangements, but must be clearly agreed upon prior to deployment. Member states and the UN have a collective responsibility for the care, custody and safeguarding of UN and contributing member states assets (UNITAR POCI, 2002).
Foresight. The administrative and logistic planning for any mission begins well before the commencement of any operation. This includes first identifying resources within or close to the deployment area and obtaining information regarding the infrastructure of the site concerned. Consideration is given to any special on-site requirements such as, clothing, munitions, accommodation and mobility. Contingency planning for strategic movement should begin at the earliest opportunity. Such a logistic reconnaissance is an important step in preparing for a mission (UNITAR POCI, 2002).
Flexibility. Flexibility in the field of logistics means the ability to conform to operational plans that will almost inevitably be subject to frequent change, particularly in the early stages of any operation. In conditions where lines of communication are liable to be disrupted, it may be necessary to deviate from pre-set procedures and to modify standard methods of operation to meet unexpected events (UNITAR POCI, 2002).
Economy. On any mission, resources are rarely plentiful and must be used effectively, efficiently and economically. Early integration of all available assets provided by the contributing member states is therefore a main goal. When possible, this integration should be planned prior to deployment to avoid duplication of resources at the mission site. Notwithstanding a desire to rationalise logistic assets at the earliest opportunity, there is likely to be a surge of operational requirements to assist with the initial deployment of any UN force and this may, in the short term, create a duplication of some resources (COE Manual, 2011).
Simplicity. The simpler the logistic plan, the easier it is to understand. The greater the understanding of the plan, the more effective will be the cooperation between contributing nations and the speed with which an original plan can be adapted to meet changing circumstances (COE Manual, 2011).
Cooperation. Cooperation will always be the key to producing a workable logistic structure for a UN mission. Levels and standards of support differ by nations. Often, there are a variety of nationalities with different languages, cultural requirements and capabilities. In order to achieve a workable logistic end product, cooperation is necessary (COE Manual, 2011).
Sufficiency. The levels and distribution of logistic resources must be sufficient to meet the sustainability and mobility needs of the operational plan. Stock levels should take into account the expected nature and duration of the mission and consumption pattern (UNITAR POCI 2002).
Accountability. Accurate accounts must be kept for all assets that are purchased and issued to contingents for the support of a mission. This includes any equipment classified as Contingent Owned Equipment (UNITAR POCI 2002).
Visibility. Logistic assets are vital to an operation and represent huge sums of money. It is important that a full audit trail is available for all assets dispatched to, in and from the mission site. This can be achieved using a number of methods ranging from barcode, satellite tracking, or basic card systems (UNITAR POCI 2002).
2.4.3 Basic Concepts of UN Logistic Support
Logistic support according to UNITAR POCI (2002) needs to be tailored to a specific mission as UN missions can vary in size from a small group of observers, who may be civilian, police, military or a mixture of personnel types, to a combined operation of land, sea and air assets involving tens of thousands of personnel. Because there are a wide range of possible missions, there is also a wide range of logistic concepts. Logistic support is tailored according to the task required, space and time considerations, manpower, material, environment, climate, onsite infrastructure and availability of resources. The support system may be mobile or static, civilian or military, have on-site warehousing or national resupply lines or, in most cases, is a combination of all of the above. A number of such concepts have proven to be workable and valuable, and includes the Self-Reliance Concept, Lead Member State Concept, The Force Logistic Support Group (FLSG) Concept and the Civilian Contract Support Concept (UNITAR POCI, 2002).
2.4.4 Types of UN Logistics Support
Logistics activities in the UN are grouped by the function they serve:
Administrative services include all managerial, administrative and clerical support services provided where required, at all levels of the mission.
Supply support requires obtaining needed goods and materials and to continue to supply them throughout the mission. These include food provisions, furniture, office supplies, cleaning materials, clothing, military equipment as well as recreational materials, and whatever else is required for a particular mission.
Transportation logistics include supplying transport as needed.
Equipment maintenance requires that all vehicles and equipment be maintained in working order. This includes communications and land based equipment.
Technical support covers training and upkeep for field or construction engineering and technical requirements. This includes the provision of water and accommodation, which at times needs to be constructed for particular missions.
Aviation support requires the provision of aviation and air services, including maintenance of aircraft and flight safety procedures.
Communications logistics covers provision of signals and communications needs, including postal and courier services for all those involved in a mission.
Personnel needs are a logistic concern. Logistics cover the administration of personnel, which may require choosing personnel or assigning them to tasks. Services also cover all needs of personnel, such as overall welfare needs, recreational needs, and the provision of amenities as much as is possible on a particular mission.
Security services include establishing and maintaining military police for military missions and the provision and upkeep of all security services.
Accounting services provide budgeting and financial services. A mission is required to keep accounts of all expenses incurred, and also to keep track of whether the expense is incurred by the UN, the contributing country, the host country, or another source.
Medical services require the logistic provision of all health services, including dental needs.
Procurement services procure all material and services required for all aspects of a mission.
General services provide mail, courier, travel and traffic services, and office supplies.
2.4.5 Contingent Owned Equipment (COE)
Contingent Owned Equipment is a major concern of this thesis. The logistics involved in the acquisition, provision and maintenance of COE establishes the business contract between the UN and troop contributing states. Contingent Owned Equipment (COE) is equipment provided by a contributing Member State (COE Manual, 2011). Maintenance of the equipment depends on the Wet Lease or Dry Lease arrangement with the Member State. The quantity and types of Contingent Owned Equipment provided to the UN are set out in agreements between the UN and the contributing Member State. Ownership of Contingent Owned Equipment is retained by Member States (COE Manual, 2011).
Binding Arrangement. One of the goals of the Contingent Owned Equipment system is to have troop contributor and the United Nations sign a Memorandum of Understanding (MOU) prior to deployment, stipulating the obligations of each party, related to personnel, major equipment and self-sustainment (COE Manual, 2011).
Reimbursement. The troop-contributors are reimbursed under wet or dry lease as per rates adopted by the General Assembly (GA). Reimbursement is limited to those items of major equipment specifically agreed by the UN. Rates of reimbursement for special equipment are negotiated separately between troop-contributor and United Nations. Reimbursement rates are adjusted for any period for which troop-contributors are not meeting the standards (COE Manual, 2011).
Verification and control. The United Nations, in conjunction with the respective contingents or delegated authority designated by the troop-contributor, is responsible to ensure that the equipment and services provided by troop-contributors meets the requirements of the peacekeeping operation and is provided in accordance with the MOU entered into by the United Nations with the troop-contributor. In order to do so, the United Nations verifies the status, condition and quantity of the equipment and services provided (COE Manual, 2011).
2.4.5.1 Major equipment
According to the COE Manual (2011), major equipment under COE can include:
Communications Equipment (network)
Electrical (generating power for base camps)
Engineering
Medical and Dental (equipment provided as per UN standards and authorized in the MOU)
Observation Equipment (observation posts)
Accommodation (semi-rigid and or hard frame structures that can be moved)
Aircraft
Armaments
Naval Vessels
Vehicles
Equipment arrangements can be made under Wet and Dry lease arrangements
2.4.5.2 Self-sustainment
The United Nations is normally required to provide self-sustainment services to troop-contributors. Should the United Nations not be able or wish not to provide the services, it can request a troop-contributor to provide those services. This can include:
Catering
Communications (telephone, VHF/UHF-FM communications, etc.)
Offices
Electrical (for sub-units)
Minor Engineering (permanent rigid structure)
Explosive Ordnance Disposal (EOD)
Laundry and Dry-cleaning
Tentage
Accommodation
Medical
Observations (Binoculars, etc)
Nuclear, biological & chemical (NBC) protection
Field Defense Stores
Miscellaneous General Stores (Bedding, Furniture, Welfare)
Unique Equipment.
2.5 COMPETITIVE ADVANTAGE THROUGH LOGISTICS AND SUPPLY CHAIN MANAGEMENT
The assumption that good products will sell themselves is no longer acceptable and neither is it advisable to imagine that success today will carry forward into tomorrow. The concern of every manager who is alert to the realities if the marketplace, is to seek a sustainable and defensible competitive advantage.
According to Christopher (2011), the source of competitive advantage is found firstly in the ability of the organisation to differentiate itself, in the eyes customer, from its competition, and secondly by operating at a lower cost and hence at greater profit. Considering the basis of success in any context, Christopher (2011) advocates that, at its most elemental, commercial success derives from either a cost advantage or a value advantage or, ideally both. He further indicated that the most profitable competitor is any industry sector tends to be the lowest-cost provider or the supplier providing a product with the greatest perceived differentiated values.
Alan Rushton et al (2010) also indicated that a company may compete as a service leader, where it is trying to gain an advantage over its competitors by providing a number of key service elements to differentiate itself. Or it may compete as a cost leader where it is trying to utilise its resources so that it offers the product at the lowest possible cost, thus gaining a productivity advantage. Christopher (2011) concluded that successful companies either have a cost advantage or value advantage or a combination of the two at its best.
2.5.1 Cost Advantage
The main route to cost reduction was suggested traditionally to be through the achievement of greater sales volume and in particular by improving market share. Christopher (2011) argues that the blind pursuit of economies of scale through volume increases may not always lead to improved profitability. Christopher's reason was that much of the cost of a product in today's world lies outside the four walls of the business in the wider supply chain. Christopher (2011) further argued that it is increasingly through better logistics and supply chain management that efficiency and productivity can be achieved and hence significantly to reduced unit costs.
2.5.2 Value Advantage
A product or service may be seen as a 'commodity' and sale will tend to go to the cheapest supplier unless the product or service offered could be distinguished in some way from its competitors, (Christopher 2011).
It is therefore important to seek to add additional values to offer to mark out from the competition. Such value differentiation could be gained essentially through the development of a strategy based upon added values and this will normally require a more segmented approach to the market. Different groups of customer within the total market attach different importance to different benefits. The importance of such benefit segmentation lies in the fact that often there are substantial opportunities for creating differentiated appeals for specific segments. Adding value through differentiation is a powerful means of achieving a defensible advantage in the market (Christopher 2011).
Another powerful and useful means of adding value is service. Christopher argues that it is becoming progressively more difficult to compete purely on the basis of brand or corporate image since markets are becoming more service-sensitive.
2.5.3 Combining Cost Advantage and Value Advantage
Successful companies often seek to achieve a position based upon both a cost advantage and a value advantage. Christopher (2011) examined the available options using the matrix below.
Figure 2.2 Logistics and competitive advantage
High
Low
Value AdvantageService Leader
Cost and Service Leader
Commodity Market
Cost Leader
Low High
Cost Advantage
Source: Adopted from Martin Christopher, Logistics and Supply Chain Management,2011 4th ed, p.7
He explained that companies who find themselves at the bottom left-hand corner of the matrix have no cost advantage as their products are indistinguishable from that of their competitors. The strategic options available are to either move to the right of the matrix to be a cost leader or upwards towards service leadership.
Cost leadership strategies have traditionally been based upon economies of scale gained through sales volumes. However, an increasing powerful route to achieving cost advantage comes not necessarily through volume and economies of scale but instead through logistics and supply chain management (Christopher, 2011) logistics costs in many industries and represent such a significant proportion of total costs that it is possible to make major cost reductions through fundamentally re-engineering logistics processes. The other way out of the "commodity" quadrant of the matrix is to seek a strategy of differentiation through service excellence.
Examples of how an organisation could compete as a service leader or as a cost leader were given by Rushton et al (2010) as shown in the figure below.
Value advantage achievement might include the provision of a specially tailored service or the use of several different channels of distribution so that the product is available in the marketplace in a number of different ways. It might include a guaranteed service level or a regular update on the status of orders. For a cost/productivity advantage, this may include a number of different means of cost minimization, such as maintaining very low levels of inventory and ensuring that all manufacturing and distribution assets are kept at a high utilization.
Figure 2.3: The Logistics implications of different competitive positions.
Cost and Service Leader
Cost Leader
Service
Leader
Commodity market
VALUE ADVANTAGE
Logistics Leverage Opportunities
Tailored Service
Distribution and Channel Strategy
Reliability
Responsiveness
Information
Flexibility
COST/PRODUCTIVITY ADVANTAGE
Logistics Leverage Opportunities
Capacity Utilisation
Asset Turn
Low inventory
Low wastage
SOURCE: Alan Rushton et al, The Handbook of Logistics & Distribution Management, 4th ed, 2010.
It should also be emphasized that for many companies it is necessary to develop differently configured logistics structures to cater for the variety of service offerings that they need to provide (Rushton, 2011). That notwithstanding, a challenge to management is to identify the appropriate logistics and supply chain management strategies to position the organisation as the cost and service leader. As indicated by Christopher (2011), it is a position of some strength occupying 'high ground' that is extremely difficult for competitors to attack. Logistics and supply chain management therefore has the potential to assist organisations in the achievement of both a cost advantage and a value advantage.
2.6 STRATEGIC LOGISTICS PLANNING
Cooper et al (1992) defined logistics strategic planning as a unified, comprehensive, and integrated planning process to achieve competitive advantage through increased value and customer service, which results in superior customer satisfaction, by anticipating future demand for logistics services and managing the resources of the entire supply chain.
Logistics strategic planning is done within the context of the overall corporate goals and plan, and requires an understanding of how the different elements and activities of logistics interact in terms of trade-offs and the total cost to the organisation. Logistics can therefore best formulate its own strategy only by understanding the corporate strategy (Grant et al, 2006).
Studies by A.T Kearney (2004) noted an increase in the complexity of logistics and supply chain environments that necessitates a better planning by logistics professionals. They defined four (4) types of complexity in such environment as:
Market-facing with regard to product development and channel selection.
Internal operating decisions and practice.
External factors such as competitors and government.
Organisational factors such as corporate governance, IT and cross-functional capabilities.
Their believe was that organisations need to take a proactive role in the strategic logistics planning process in their companies, and differentiate their activities from a uniform and 'predictable' model to more responsive models in order to handle increasing complexity. Figure 2.4 below shows an example of how this could be done by organisations.
The Type 1 model focuses on a lean and efficient operation that is dominated by making products. The Type 2 model focuses on supplying complex products to specific requirements, with long lead-times, which require collaborative planning and supply chain partners. The Type 3 model focuses on maximizing efficiency to meet customer demands in terms of volume and mix, thus requiring flexibility and late configuration of finished goods (A.T Kearney, 2004).
Figure 2.4: Differentiation of Logistics and Supply Chains
Manage and ControlType 1:
Plan
Make
Procure
Distribute
Store
Type 2:
Manage and Control
Manage and Control
Procure
Plan
Distribute
Store
Make
Store
Make
Plan and
Procure
Distribute
Type 3:
Manage and Control
Distribute
Plan
Procure
Make
Store
Make
From uniform… … to differentiated
Source: Adopted European Logistics Association and A.T. Kearney, Differentiation for Performance; Excellence in Logistics 2004
2.6.1 Formulating the Strategic Logistics Plan
In their book "Fundamentals of Logistics Management", Grant et al (2006) indicated that the development of the strategic logistics plan is dependent on the marketing, manufacturing, finance/accounting and logistics functional areas.
Marketing provides information about product or service offerings, pricing and promotion for each channel. This includes planned sales volume per month, type of customer, and regional areas; product introductions and deletions; and customer service policies for various types of customer and geographical area. Manufacturing provides information such as locations of current and planned production facilities, and planned volume and product mix for each site. When the same product is produced at multiple locations, logistics can determine how to serve each market most efficiently. Finance/accounting provides cost forecasts related to inflation rates and growth assumptions that need to be built into the planning process to project future costs, and as well the data for performing cost trade-off analysis. It is also responsible for capital budgeting, which determines the availability of capital to finance expenditures to improve logistics equipment and infrastructure.
Logistics itself provides data and analysis related to the existing logistics network to the other functions, including current storage and distribution facilities owned and rented, both at manufacturing locations and in the field; equipment and capabilities at each location; and current transportation arrangements between various channel members. Logistics must identify the costs associated with these activities and the various channels used and proposed.
Management needs to put the logistics plan into operation through the channel members it chooses. Channel members should be judged and selected according to predetermined criteria designed to meet logistics objectives, such as reliability, consistency, geographical coverage, variety of service offerings, use of information technology and cost.
2.6.2 Components of Strategic Logistics Plan
Stock and Lambert (1987) indicated that the strategic logistics plan should consist of the following:
A management overview, describing the logistics strategy in general terms and its relationship to the other major business functions.
A statement of the logistics objectives related to cost and service for both product and customer.
A description of the individual customer service, inventory, warehousing, order processing and transportation strategies necessary to support the overall plan.
An outline of the major logistics programs or operational plans described in sufficient detail to document plans, related costs, timing, and their business impact.
A forecast of the necessary workforce and capital requirements.
A logistics financial statement detailing operating costs, capital requirements, and cash flows.
A description of the business impact of the logistics strategy, in terms of corporate profits, customer service performance, and the impact on other business functions.
2.6.3 Developing the Strategic Logistics Plan
According to Grant et al (2006), the development of a strategic logistics plan requires the following:
A thorough grasp and support of corporate strategy and supporting marketing plans in order to optimize cost-service trade-offs.
A thorough understanding of how customers view the importance of various customer service elements and the performance of the firm compared with its competitors.
Knowledge of the cost and profitability of channel objectives.
Stock and Lambert (1987) stressed that when the overall corporate strategies and marketing plans have been determined, the logistics planner must evaluate basic alternatives and recommend the system configuration that satisfies customer requirement at lowest total cost. This implies, the process must begin with identifying and documenting customer service goals and strategies. The collection of such information is achieved through logistics audit.
2.6.4 The Logistics Plan
The logistics plan starts with a definition of customer service goals and strategies (Stock and Lambert, 1987). This will determine inventory goals and deployment strategies, warehouse strategies and programs, transportation strategies and programs and order processing strategies and programs.
The factors that must be evaluated to determine the most efficient and effective logistics strategy include: customer service requirements, variability of demand, number and location of warehouses, material handling methods, the frequency of replenishment, shipment size, modes used, order cycle times and total costs (Stock and Lambert, 1987).
Stock and Lambert (1987) finally summarised the logistics planning process in terms of 11 major steps as follows:
Initiate and plan the process.
Evaluate the current logistics activities.
Identify product manufacturing requirement.
Determine the impact of business growth.
Develop a profile of competitive logistics networks.
Develop customer service requirement.
Rationalise the logistics network.
Review and recommend improvement.
Formulate performance measurement and service levels.
Review and recommend steps to improve organizational responsibilities.
Document the plan and prepare an implementation plan.
2.7 LOGISTICS PERFORMANCE MEASURES
The logistics function has long been under pressure to demonstrate its contribution to organizational performance (Rutner and Langley 2000). Consequently, research in logistics has examined the influence on organizational performance of high-performance logistics practices and capabilities. For instance, previous research has shown that excellence in performing logistics activities and capabilities is associated with superior organizational performance (Lambert and Burduroglo 2000; Lynch, Keller, and Ozment 2000).
With the increasing awareness of the strategic implications of logistics (Cheng and Grimm 2006; Stank, Davis, and Fugate 2005) and the growing awareness of the benefits of leveraging logistics to increase customer value (Mentzer and Williams 2001; Stank et al. 2003), measuring the performance of logistics has become a high priority (Griffis et al. 2007). Understanding logistics performance has long been of interest to logistics researcher
